Online Banking -- An Offshore Banks Best Friend

Online Banking with Offshore Banks

Online banking has been the great equalizer in the race for customer service with domestic based banking institutions. In some ways, the domestic banks brought it on themselves. In their push to lower the transaction costs of deal with customers deposits, check clearing, withdrawals, etc, they first pushed the automatic teller machine.

ATM Cards, and the Automatic Teller Machine

The atm was embraced by clients because of the 24 hr availability and the "convenience" factor. It meant not having to wait in line, and not have to rush to the bank before closing on friday or be stuck with no money on the weekend.

At the same time, people were able to maintain relationships with banks that didn't have a physical presence in their hometown--or even state--by using mail (for statements) and of course the ubiquitous automatic teller machine and atm card.

Telephone Banking

Probably the next "giant leap forward" in automating banking services was telephone banking. Banking and at times brokerage services and bill paying was moved to the telephone. Automated systems were setup to handle routine customer service issues like balance inquiries, checking on a check clearing, and at times more complicated transactions like authorizing the payment of a bill.

Telephone banking was the next step in removing the banking client or customer from the physical bricks and mortar bank. People were becoming more comfortable with having bank accounts at banks where they rarely or never actually visited any of the banks branches. I myself had a bank account with Navy Federal Credit Union while stationed overseas and never missed a beat. Direct deposit and auto-pay of my more critical bills meant everything was handled via phone, or more likely back then snail mail.

Although telephone banking was a giant leap forward, it didn't last long because it was a precusor to what we routinely enjoy today, which is internet based world wide wide online banking 24/7 365 days a year.

Internet Banking

The Internet as a medium does a few things very well. In the early days, those things generally centered around accessing, organizing and presenting large amounts of data -- OR dynamic data -- data that changed quickly and timely information was important.

This is what made online banking one of few killer commercial applications for the Internet. Again, in the name of customer service and reducing costs, banks moved all manner of customer service functions to the internet.

Before long, deposit checking, incoming and outgoing wires, auto bill pay, ach transactions, credit card clearing, transaction reviewing, statements, applications for new accounts/account opening documents, loan payments, loan applications, approvals, and general communications with customers were being handled online. In the wake of all this automation we even got some banks who operate mostly, or even wholly online

The Online Bank

Some online banks popped up amidst the push to move everything online and onto the internet and also driven by customers' acceptance that they didn't need a physical location in which to visit.

Etrade, an online brokerage company, moved heavily into online banking, including loan and mortgage originations in the first part of the 21st century.

In addition, many online banks either whole or in part, came into operation and being. People were getting more comfortable with banking happening in a town they would never visit and it increased competition for all players, while opening some doors for some others.

Online Offshore Banks

Offshore banks were one of the beneficiaries of this giant push towards automation. One of the drawbacks of opening an offshore bank account has always been the feeling of being separated from your money.

While the physical separation is, of course, what brings the benefits of having an offshore bank, it was a stumbling block for some.

Technology has shrunk the world of finance and made it easier for some to adapt to having their funds in a bank in a foreign jurisdiction or tax haven offshore.

With the advent of atms, offshore credit cards, and offshore atm cards working off the same networks as the domestic banks.

Telephone banking once again made it easier to manage funds and carry out "day to day" banking tasks via a telephone and often automated to accept directions via a touch tone menu.

Then with the explosion of popularity of the internet, world wide web, internet banking, and comfort level with carrying out financial transactions online, the true online offshore bank was born.

Online offshore banking in some ways brings together the best of both worlds. You are close to your money, while those you wish to keep you financial affairs private from, are "worlds away".

Of course, it should be noted that all this technology also makes it easier for snooping governments or organizations to track your financial affairs, so care should still be taken if financial privacy or bank secrecy are concerns of yours to choose your online offshore banking partners wisely.

Until next time!

Private Interest Foundations

Private Interest Foundations

Foundations have been around since before the dark ages -- literally.

They are reported to have been in use during the later part of the Roman Empire.

While they have no analogue in Anglo-Saxon law, they are an incredibly useful and flexible tool. For the uninitiated a good way to think of a Foundation is like a hybrid between a Corporations and trusts.

While foundations were originally conceived to take care of the shared interest of large groups (like townships) their recent popularity has come about as a result of the privacy, flexibility, and anonymity in their use as asset protection and intergenerational, heirship, and inheritence planning.

The "private interest foundation" began when the principality of Liechtenstein created the Law of Persons and Companies", Jan. 20, 1926.

Since then, wealthy families in Europe leveraged the private interest foundation in Liechtenstein for the purpose of estate-planning necessities, to ensure the safe transition of assets to the family's beneficiaries.

Today, Liechtenstein Foundations can cost upwards of 25k to incorporate and up to 10k/year to maintain.

The Panama Private Interest Foundation was created by law in 1995 by taking some of the most desirable elements from three other jursidiction's foundations: Liechtenstein, Switzerland, and Luxembourg.

In my next entry, I'll discuss some of the benefits Panama's Private Interest Foundation offer families and individuals. And, I'll discuss where they are useful, and what their limitations include.

Why the Best Private Accounts aren't "Offshore"

While, as stated previously, there are many reasons why one might want to move their monies "offshore", for a large majority, often times the most effective offshore locations will be those that aren't thought of as "offshore".



How do we define an "effective" Offshore Location?



By effective, I mean simply, that it does what it was designed to do. For most people going offshore is driven by one or a combination of the following factors:

1. Asset Protection


2. Reduction of Legal Risk


3. Tax Avoidance


4. Diversification of Political Risk


5. Diversification of Banking/Currency Risk

Asset Protection

Asset protection is a complex, ever changing subject and worthy of its own series of articles. Suffice it to say that private offshore accounts can play a significant part of a larger asset protection strategy. This is especially true in jurisdictions where tort law and lawsuits (frivolous and otherwise) are very easy to file, and very expensive to defend yourself against.

Reduction of Legal Risk

that appear to be to be effective, should be completely legal

When we look at these reasons, financial privacy, in most cases becomes a critical component for accomplishing any of these goals. Quite simply, the most effective strategy strategy often incorporates some degree of discretion in your financial activities.

Tax Avoidance

Your offshore tax avoidance strategy should be completely legal. However, to be effective longer term it also helps if your strategy isn't heavily advertised. In other words, you want to be discrete about your activities -- even those that are completely legal. Why? Well, governments, especially those under financial pressure can change tax laws at whim. Those tax laws that seem to be disproportionately benefitting a small group (especially those without significant political leverage) are at greatest risk for being changed to your detriment.



Diversification of Political Risk



Often times, individuals with a lot to lose, will find themselves in a difficult political environment. This can be especially true if you are in developing country and additionally reliant on international relationships between your jurisdiction and one or more G-8 countries. Through no fault of your own, you could find it very difficult to expatriate funds, repatriate funds, or get any international banking services at all.



Diversification of Banking/Currency Risk



Financial Privacy



Most of the reasons that one would want to move funds offshore would be for security/diversification and most of these moves at diverstification and security are undermined when you are high profile with your moves or where your funds are being held.



Moving large (or even seemingly inconsequential amounts of cash) into and out of "known" offshore banking centers can bring an unwanted amount of scrutiny to your financial affairs that go counter to the whole reason for wanting to move some of your nestegg "offshore" in the first place.

Offshore Credit Card

An Offshore Credit Card

That seems to be the common lynch-pin of the "offshore" dream....especially of the wanna-be's.

Now, I don't use the term "wanna-be" in a derogatory fashion. Heck, I'm one of them. I use it to refer to the person who wants to be at the level where he can have a few 10 million USD sitting idle in an offshore account protected from would-be frivilous lawsuits, creditors, and changes in their respective tax laws -- but isn't quite there yet.

This is the group of people wants and needs more than infrequent access to that money. With the scrutiny an offshore bank wire invites, not mention the cost and hassle, what could be better than having your money safely ensconced offshore in a tax haven -- presumably with strong bank secrecy laws -- and having immediate acces to you funds back home?

Not So Fast

Well, unfortunately, for most residents of high-tax regimes, the tax collection authorities have been wise to this scheme for quite some time. They've even had the time to release some official directives regarding the use (and abuse) of offshore tax shelters and an offshore credit card for convenient, supposedly secure access to your money.

You can click on this link to view more what the IRS has to say about offshore credit cards in their offshore credit card program memorandum.

Offshore Credit Cards are Legal -- Tax Evasion is Not

If you'd rather not dig through an IRS document (who can blame you) I'll save you some time. The IRS's official stance is that like an offshore bank account an offshore credit card or using offshore atm cards to access the money in your account is not illegal -- as long as it is not done as part of a scheme to evade taxes.

Duh, huh?

So, for the average US citizen this isn't really a great route -- because odds are, you have the offshore account and credit card or bank card as a means to hide money from someone, right? Following the US federal government's directives, you are obligated to file a form with the US Department of Treasury for any offshore account.

Presuming that it is NOT the US government or tax collection agencies that you are trying to hide the money from, is it conceivable that your creditors could subpoena such information and get it directly from the US government. Are you willing to lie under oathe if asked directly regarding ownership of assets offshore or an offshore account specfically?

So, How CAN I hide money offshore?

Like the old saying goes, probably the best way to do this is by hiding it "in plain site". In other words, through a more complex offshore asset protection structure designed specifically to protect your assets in cases of direct attack -- even when the litigants (or attackers) know about the structure itself.

OK, admittedly, these aren't the cheapest thing to setup. However, if you have sizeable assets, and/or a good chance of having your assets come under attack by an estranged spouse, settlement, court order, criminal mischeif, or tax law changes detrimental to your previous asset planning it could be money very well spent. What is the price of peace of mind?

If you want to know about forming trusts or an offshore company formation, following the links to read more. Depending on your needs, this company here has some very complex tax neutral asset protection structures that could meet your needs.

Good luck with your search for the holy grail -- the offshore credit card.

Expat Finance

Hey, what can I say? I've been incredibly neglectful of this site. This is the only post so far this year and i still haven't even moved the site over to its actual URL yet. it's sitting here languishing with its original blogspot address. :)

To stay topical to the theme of the blog i'm going to blame expat finance.

Expat Finance

One of the reasons I haven't been able to post as frequently as I wanted to was that I took a day job working with some expatriates. If you want to break into the world of high finance, becoming an expat in Uruguay is probably not the way to go about it.

However, as fate would have it, it turns out that Uruguay has very strong bank secrecy laws, and serving the expat community's banking needs was something that interested me alot.

Offshore Banking House

However, the idea was not just to serve expats, but to give those who are planning to expatriate or even those who are just seeking a more diversified financial security through a non-resident account in stable banking regime options.

But it goes beyond merely an offshore bank account.

We are looking to deliver trulyunique financial services such as:

• Anonymous Investments
• Unlimited Bank Wires
• An Offshore Credit Card
• Check Clearing
• Online Offshore Account Opening and Operation
• Offshore Accounts in 11 Currencies
• Precious Metal Warehousing and Precious Metals Investments
• Back to Back Loans
• Offshore Company Formation
• Factoring, and
• Offshore and high risk merchant account services, and
• Even the ability to buy an offshore bank -- well ok, actually a tax haven banking entity known as a new zealand offshore financial company.

All in all, there is just a heck of a lot more stuff to talk about regarding the banking -- and this seems like the place to do it for now.

I'll type at you soon.

The Offshore Banker

Private Offshore Accounts for US Citizens

(most of this information came from an interview with some friends of mine in the business of providing offshore banking services. They service predominantly non-US citizens since it is just a whole lot easier. However, they had some interesting tidbits for those that are looking to move some money offshore of open an offshore bank account as you'll see below).

Sometimes US citizenship isn't all it's cracked up to be. While immigrants from around the globe sometimes view the US as their opportunity for financial advancement, citizenship brings with it it's own set of challenges. This is especially true for those trying to offshore with their assets.

If you are a US citizen resident anywhere in the world, or a US resident for tax purposes, and have a financial interest, signature authority, or other authority over any financial accounts, including bank, securities/stock, or other types of financial accounts in a foreign country and the account exceeds $10,000 at any time during the calendar year you must report that relationship each calendar year with the Department of the Treasury on or before June 30, of the succeeding year by filing TD F 90-22.1


Of course, when you do, you automatically add your name to a FINCEN database of potential money launderers. This means the government will scrutinize everything you do. This is a Treasury form, NOT an IRS form, so you do not even have the very limited privacy protection that goes along with IRS filings.

So what are your choices?

The course most often chosen is simply not to file. This is illegal and can carry a fine of up to US$500,000 and prison time. That being said, I have never known anyone who was prosecuted simply for not filing this form. The government’s preferred modus operandi is to prosecute a person for tax evasion and/or money-laundering, and then add every year they did not file this form as a predicate count in order to run up the total number of years in prison the defendant is looking at.

Some chose to file the report and hope for the best. So long as everything you do is legal and squeaky clean, compliance is always the best route.

That being said, there are two more choices that allow you NOT TO FILE AND NOT TO BREAK THE LAW.

FIRSTLY, you can hire a bonded fiduciary who signs on foreign accounts on behalf of a company, or other entity; but in that case you have to trust the fiduciary, make sure the bond is bulletproof, AND do your company paperwork in exactly the proper way so you don’t end up still having “other authority” as the IRS defines it, and defeating the whole exercise.

Also, one can establish a gold repository account, at some place like the Perth Mint where you could be the signatory on the account and STILL LEGALLY NOT REPORT IT because, properly set up, it is a storage contract, NOT a financial account.
For many people this is absolutely the very best choice. If you:

1. avoid using a US representative, and
2. set up the account outside the US, and
3. make the payment through a non-US payment service,the whole transaction can be handled privately and without filing any government reports.

There are other steps you can take to add layers of asset protection as well—all without filing special reports or tax filings. The best thing about this option is that you do not have to trust anyone else to sign on your account!

Happy Offshore Banking!

Expatriating Money

"Expatriation of Assets", "Expatriating Money", or "Expatriation of Money"

Expatriating Assets is usually done by someone looking to diversify risk over more than one banking system, currency, taxation regime or political system.

While it becomes more urgent if you feel your assets, your money, or your saftey are being threatened, often times people interested in security and peace of mind will expatriate a portion of their assets "just in case". None of us has a crystal ball and are completely clairevoyant, and for that reason, it often makes sense to have money or other assets which have been expatriated in times of free capital movement across borders as a security measure BEFORE things tighten up.

The expatriation of assets is often severely limited by governments fearing capital flight. The most recent, very visible example was in Argentina in the first part of this decade. Experienced professionals in thie area can create vehicles and transfer mechanisms which can accomplish asset expatriation using various safe but very private strategies.

Good luck Offshore Banking,
fuBarrio